CPP Change Legislation – Oct. 7, 2016

The B.C. Government completed its review and has now signed onto the CPP Changes.  This officially results in nine Provinces (excludes Quebec for now) accepting the enhancement process for the Canada Pension Plan.  As a result on October 7, 2016 the Federal Government introduced CPP Enhancement legislation.  It is now important for all Canadian employers to begin the process of reviewing their pension and benefits programs to integrate with an enhanced CPP.

The CPP Changes summarized on June 22nd closely match the new legislation provisions and will result in increased employer and employee CPP contributions and enhanced benefits over time.  In particular the pension benefits will increase to 33% of earnings from the current 25%, with more earnings being covered and disability and survivor benefits will also increase proportionately.  Contributions will increase by 2023 to 5.95% of covered earnings for both employer and employee.  There will be additional contributions of 4% from 2024 for excess earnings above the regular YMPE.

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